The UK is the crime capital of Europe as retail theft soars to 4.1 billion

This article is brought to you by Retail Technology Review: The UK is the crime capital of Europe as retail theft soars to 4.1 billion.

The UK is the retail crime capital of Europe, according to a report published by one of the worlds leading security solutions providers, Checkpoint Systems.

The annual study carried out for Checkpoint by the Centre for Retail Research shows that in the past year, retail crime topped 4.1 billion, highlighting the hidden impact that the credit crunch is having on the high street. This means that the UK is officially the worst nation in Europe for shoplifting and third in the world behind global powerhouses the USA and Japan.

According to the Global Retail Theft Barometer the largest report of its kind in the world, surveying 920 of the leading international retailers retail theft or shrinkage (stock loss from crime and wastage) has posed a serious problem for the UK over the last 12 months, with 4 billion worth of stock going missing during this period alone. Despite this declining slightly in the last year to represent 1.3% of sales turnover, the UK still boasts higher than European-average shrinkage levels (1.27%). And this is bad news for hard-pressed consumers who end up bearing the brunt of this social scourge, which is the equivalent of criminals taxing every household in Britain by approximately 189 a year.

As economic doom and gloom casts a dark shadow across the country and disposable income reaches an all-time low, it comes as no surprise that light-fingered customers and employees have been looking to unlawful means in a bid to get their hands on the most desirable goods. While in the UK, external theft made-up of opportunistic shoplifters and organised gangs accounted for 42.6% of total shrinkage, most worrying, was the amount lost through employee theft. After Ireland, the UK ranks as the worst in Western Europe for theft by dishonest members of staff, with 34% of all shrinkage originating from within.

The largest source of loss generated by fraudulent employees across Europe was merchandise theft, costing 2 billion and accounting for 30.4% of all internal fraud. Cash, coupons and vouchers represented the second most stolen items, costing retailers 1.8 billion and making up 27.2% of total internal fraud. Refund fraud and false price markdowns, the third largest source, cost retailers 1.5 billion whilst collusion and large financial frauds came in at 825 million and 543 million respectively.

Against the backdrop of a troubled economy and with margins squeezed ever-tighter, loss from theft has been a tough cross to bear for retailers financial performance. This is not surprising given that across Europe, retailers have reduced spend on security and loss prevention this year by 4.9% compared to 2007. Nevertheless, 5.5 billion was invested in security and loss prevention by European retailers, equivalent to 0.34% of total retail sales in the year to June 2008. Of this, the amount spent by UK retailers on security measures came to 838 million, third only behind France and Germany.

This year, off licences and liquor stores were the biggest losers in the fight against retail crime with shrinkage as a percentage of turnover increasing by 6.3%. Increases were also reported by electrical goods and computer retailers (3.6%), discounters/cash and carry stores (2.6%), hardware / DIY merchants (2.3%) and department stores (2.1%). Meanwhile, it has been good news for the supermarkets, jewellers and footwear / sports retailers, all of whom have successfully achieved a decrease in shrinkage levels by 5.0%, 4.1%, 3.0% respectively.

Expensive, branded products that are in high-demand are top of thieves shopping lists this year according to Checkpoint Systems Global Retail Theft Barometer. The most frequently stolen products, in order, are alcohol (specifically whisky, vodka and champagne), cosmetics and skincare, womenswear, perfumes and fine fragrances, razor blades, DVDs and games, childrenswear, accessories, designer wear, high-cost and speciality meat and fish, including fresh meat, ham and seafood and cheese.

In the current economic climate, retailers cant afford to be blas about security, commented Neil Matthews, Vice-President of Checkpoint Systems NCE. Inevitably, the worse off people are, the more likely they are to turn to crime. Its not rocket science, but it is essential that retailers have the right controls in place to ease a pressure that is only likely to get worse as we go into 2009. Were already witnessing the effects of budget reductions and the social and business implications are huge.

Before the credit crunch hit, we were definitely identifying an overall shift in attitude towards product protection. The issue was gradually moving up the boardroom agenda and gaining the recognition it deserved, and I hope that this doesnt stagnate now when attention is needed the most. Retailers should be looking at ways to increase sales in theses tough times, not how to make up the deficit. A high level of shelf availability and open merchandising certainly helps, but with an increased temptation to steal in this climate, greater product protection is certainly required. There is great work being done to increase the effectiveness of security solutions and we need to keep momentum up now and for the future.

With the report stating that more than one-third of the 50 most stolen lines are not specifically protected, retailers only have themselves to blame for such high shrinkage figures. However, of the items that were protected, 36.0% of them incorporated EAS systems, 17.7% boasted hard tags, 10.4% carried soft or paper tags while 7.9% were protected by EAS source tagging, applied at the time of manufacture. Other significant methods ranged from keepers and locked boxes to product alarms which were used to protect 7.2% of the items.

For further information about the Global Retail Theft Barometer please visit

www.globalretailtheftbarometer.com.